U.S. stock quotes

PPS provides absolute real time quotes on U.S. stocks. Real time quotes are also reflected on each individual trade record and on each of your orders.

2. What’s the charge for real time quote service?

PPS is currently running a promotion – All eligible accounts enjoy free real time quote service immediately after registration. (Post-promotion standard charge for real time quote service is $10 per month.)

1. U.S. stock trading hours

U.S. eastern standard time（EST）：

Monday through Friday, 9:30 AM – 4:00 PM

Beijing Time（Non-U.S. Daylight Savings Time period, November – March of next year）：

10:30 PM– 5:00 AM the next morning

Beijing Time（U.S. Daylight Savings Time period, March -- November）：

9:30 PM –4:00 AM next morning

2. Minimum trading unit for U.S. stocks

Unlike A shares or Hong Kong stocks, U.S. stocks do not adopt the concept of a board lot, and therefore there is no trading unit limit. The minimum trading unit is 1 share.

3. Share price fluctuation rage for U.S. stocks

Unlike A shares, U.S. stocks do not have daily share price limit up or limit down. This may mean heightened risks, which investors should be aware of.

4. Day trade for U.S. stocks

Day trade is a pattern of security trading. It refers to an investor buying and selling a particular stock or stock option position within the same day. Day trades are also called T+0 trades. U.S. Securities and Exchange Commission (SEC) has specific regulations around day trades, which specify that accounts with net assets of less than $25,000 are only allowed 3 day trades within 5 consecutive trading days. Accounts with net assets of over $25,000 have no limit to number of day trades they can make.

Below are some day trade (T+0 trade) examples:

（1）An investor started the day with a bear position on a particular stock (i.e. he held no shares of the stock). He bought 200 shares of the particular stock, and then bought another 300 shares of the same stock. Later in the day, he made 3 trades, and each time sold 100 shares, 200 shares, and another 200 shares of the particular stock. How many day trades (T+0 trades) did the investor make?

Correct Answer：1 day trade (1 T+0 trade)

（2）An investor started the day with a bear position on a particular stock (i.e. he held no shares of the particular stock). He bought 200 shares of the particular stock, then sold 200 shares of the same stock. Later, he bought another 300 shares of the same stock, and then sold 300 shares of the same stock before the end of the day. How many day trades (T+0 trades) did the investor make?

Correct Answer：2 day trades (2 T+0 trades)

（3）An investor started the day with a bear position on a particular stock (i.e. he held no shares of the particular stock). He bought 500 shares of the particular stock, then sold all 500 shares in 3 different trades before the end of the day. How many day trades (T+0 trades) did the investor make?

Correct Answer：1 day trade (1 T+0 trade)

（4）An investor started the day with a bear position on a particular stock (i.e. he held no shares of this particular stock). He bought 100 shares, 200 shares, and 300 shares of the particular stock in 3 different trades. He then sold all 600 shares in one trade. All 4 transactions were in the same day. How many day trades (T+0 trades) did the investor make?

Correct Answer：1 day trade (1 T+0 trade)

（5）An investor started the week with a bear position on a particular stock (i.e. he held no shares of the particular stock). On Monday, he bought 500 shares of the particular stock. On Tuesday, he bought another 500 shares of the same stock. Later on Tuesday, he sold 500 shares of the particular stock. He bought yet another 500 shares of the particular stock. How many day trades (T+0 trades) did the investor make?

Correct Answer：1 day trade (1 T+0 trade)

（6）An investor started the week with a bear position on a particular stock (i.e. he held no shares of the particular stock). On Monday, he bought 500 shares of the particular stock. On Tuesday, he sold 500 shares of the particular stock. Later on Tuesday, he bought another 500 shares of the same stock. How many day trades (T+0 trades) did the investor make?

Correct Answer：0 day trade (0 T+0 trade)

5. Clearance and settlement process for U.S. stocks

U.S. stocks adopt the T+3 settlement process. Clearance and settlement of a trade is completed on the 3rd trading day after the day of the trade.

6. U.S. stock markets

（1） New York Stock Exchange (NYSE)

New York Stock Exchange is the second largest securities exchange in the world. Approximately 2,800 companies are listed on NYSE, which means their stocks are traded on NYSE. The total market value tops $15 trillion.

（2） NASDAQ Stock Market（NASDAQ）

NASDAQ Stock Market is a stock market largely based on an electronic network. Approximately 5400 companies are listed and their stocks trade on NASDAQ. It is the U.S. stock market with the most listed companies and largest trading volume. NASDAQ is also the biggest online trading exchange in the U.S.

（3） American Stock Exchange (AMEX)

American Stock Exchange is currently the third largest stock exchange in the U.S. AMEX is the only stock exchange where stocks, options, and derivatives can be traded simultaneously. AMEX is the only stock exchange that caters to companies with medium to low market value and provides them with a spectrum of services aimed at raising their market profile.

（4） Pink Sheet Exchange (PK)

Pink sheet trading has been incorporated into the bottom level of NASDAQ’s stock quotation system. Pink sheets are a lower level form of quotation within the U.S. over the counter trading market.

（5） Over The Counter Trading Markets (OTC)

OTC is a market conducted directly between dealers and principals via trading platforms other than exchanges. In other words, it is a spread-out trading network outside of the central location of an exchange. Unlike an exchange there is no automatic disclosure of the price of deals to other market participants, and deals and traded instruments are not standardized. In a generalized sense, OTC markets include NASDAQ, OTCBB (Over The Counter Bulletin Board) and PK. NASDAQ has the highest level of requirements for OTC securities to be traded, followed by OTCBB, while PK has lowest requirements.

Order Types

1. Market Order

A Market order is an order to buy or sell securities at the market bid or offer price.

Advantages of a market order: A market order has the highest likelihood of being filled and it has the highest speed of execution. However, unlike a limit order, a market order provides no price protection and may fill at a price far lower/higher than the current displayed bid or ask price.

Notes and Remarks：

A market order guarantees a fill or execution, but it does not guarantee the price the order is filled or executed. When the market is moving fast, or for securities with low trading volume, market orders may end up executed with a price higher or lower than you have previously seen in the market.

Orders placed pre-market or during after-hour trading, may be executed at a higher or lower price when the market opens. For U.S. stocks, market orders are only allowed starting at 8:10 AM EST, on each trading day. Before 8:10 AM EST, only limit orders are accepted. The Beijing time equivalent to 8:10 AM EST is 8:10 PM during U.S. Daylight Savings Time, and 9:10 PM during Non-U.S. Daylight Savings Time.

2. Limit Order

A Limit Order is an order with a specified price. The order will only be executed when the price reached is the specified price or is better than the specified price. It is similar to the “regular order” with A Shares.

Advantages of a limit order：With a limit order, the range of price is specified by the investor, but the order may not be executed at exactly the price specified. It can be executed at a more favorable price then the specified one. For buy orders, a limit order will only be executed at the specified price or lower. For sell orders, a limit order will be executed at the specified price or higher.

Notes and Remarks：

If the stock price does not reach the specified price, a limit order does not get executed.

For a limit order placed on a stock whose price is moving very swiftly in one direction, uncertain trading time can cause the investor to miss an opportunity. Some unexecuted limit orders can be changed or cancelled.

However, the original limit order is still in effect during the change or cancellation process. If the original order is executed during the change or cancellation process, the change or cancellation will not take effect.

3. Stop Order

A Stop Order is an order with a specified price called Stop Price. Once the stock price reaches the stop price, the order is executed at market price. The difference between a stop order and a limit order is that stop orders sell when the price is at stop price or lower, or buy when the price is at stop price or higher.

Advantages of a stop order: Stop orders help investors stop loss or maintain profit on a certain stock or option.

Notes and Remarks：

Stop orders don’t guarantee success of order placement or order execution. Lack of purchasing power or inadequate positions in an account may prevent the investor from successfully placing a stop order. Orders that are placed may not get executed either. Once the stock price reaches the stop price, a regular market order is triggered. If there is no buyer or seller, the order will automatically expire at the end of the trading day.

Also, when the stock price reaches the stop price, the stop order triggers a regular market order is triggered. However, the triggered market order is not connected to the original stop order. At that point, if the stop order is cancelled, the triggered market order may still be executed.

Frequently asked questions regarding stop orders：

止损单其他相关问题：

Question：Can I use a stop order to help protect gains on a stock? For example, I buy a stock at $50 per share, and I want to sell the same stock at $60 per share. Can I place a stop order at $60 per share to achieve this goal?

Answer：No. Stop orders cannot be used to help protect gains. If you place a stop order as described in your question, as long as the current price of that stock is under $60 per share, the order will be executed immediately at market price.

Question: If that’s the case, what should I do to make sure that the stock I bought at $50 per share is sold when the price is at $60 per share or higher?

Answer: PPS currently doesn’t support stop buy orders. You can place a limit order to sell at $60 per share. That will achieve your goal.

Question：If I don’t have a position in a certain stock, can I still place a stop order for that stock? If so, what is the outcome?

Answer：Yes. Usually, stop orders are placed when you have a position in a stock. It helps stop your loss on the stock. If you don’t have a positon in a stock and you place a stop order for that stock, the stop order will to some extent help track the stock’s price trend.

For example, assume that ABC stock is currently trading at $35 per share. You think if the ABC stock g $30 per share, it may fall further. You can place a stop order for $30 per share even if you don’t have a position in ABC. The system will place a sell market order when ABC’s stock price drops to $30 per share.

However, you need to understand that if ABC’s stock price goes to $28 per share, the market order is executed right away.

4. Stop Limit Order

Stop limit orders require the investor to specify both a Stop Price and a Limit Price for each order. When the stock price reaches the stop price, a limit order is triggered. The difference between a stop limit order and a stop order is that for a stop limit order, a limit order is triggered when the stock price reaches the stop price.

Advantages of Stop Limit Orders: A stop limit order triggers a limit order when the stop price is reached, rather than triggering a market order. It can help mitigate the risk of a stock being sold at a price much lower than the investor expects.

The difference between a Stop Order and a Stop Limit Order:

A stop order triggers a market order when the stock price reaches the stop price, which guarantees the execution of the order, but does not guarantee at what price the order is executed at. A Stop Limit Order triggers a limit order when the stop price is reached. The limit order will only get executed at a price equal to or better than the limit price set by the investor. So the price is guaranteed to some extent, but there is no guarantee that the order will be executed.

Notes and Remarks：

A stop order is guaranteed to be executed, although the execution price could be much lower than the stop price.

For a stop limit order, if the price of the stock falls rapidly, the triggered limit order runs the risk of never getting executed. This means that the investor’s loss may keeps increasing.

Operating Tips：

If you are buying, the limit price should be higher than the stop price.

If you are selling, the limit price should be lower than the stop price.

Example:You bought 100 shares of XYZ stock at the price of $10 per share. Now you want to limit possible losses to $100. You place a stop limit order on the 100 shares of XYZ stock. You set the stop price at $9.10 and the limit price at $9 per share. If XYZ’s market price reaches $9.10, it will trigger a limit order to sell your 100 shares at a price no lower than $9 per share.

5. Trailing Stop Order (Price Difference and Percentage Difference)

Trailing Stop Orders don’t specify a definite stop price. Instead, a Trailing Stop Order specifies a price different from the moving market price of a stock as the stop price point. The price difference can either be specified in a dollar amount or as a percentage of the market price.

Advantages of Trailing Stop Orders:

The stop price of a Trailing Stop Order is automatically adjusted. When the market price of a stock is moving in a favorable direction, the stop price is adjusted based on the price difference or percentage different from the market price as specified by the investor.

Note and Remarks:

Trailing Stop Orders don’t guarantee execution. When the stop price is reached, the system triggers a market order or a limit order. Just like market orders and limit orders, if there is no taker for the offer/bid by the end of the trading day, the order expires automatically.

Also, once a trailing stop order triggers a real market order or limit order, the real order no longer has a connection to the original trailing stop order. Cancelling the original trailing stop order has no impact on the triggered order.

Trailing stop orders allow investors to specify the limit for loss, but not specify the limit for profit. In other words, Trailing Stop Orders allow an investor to maximize the profit opportunity on a stock while setting a limit to an investor’s possible losses.

How do trailing stop orders work?

For a “Sell” Trailing Stop Order, if the market price goes up, the stop price rises accordingly. However, when the market price falls, the stop price doesn’t change. When the market price reaches the stop price, a market order is triggered.

For a “Buy” Trailing Stop Order, if the market price falls, the stop price drops accordingly. However, when the market price rises, the stop price stays the same. When the market price reaches the stop price a buy market order is triggered.

Example: You purchase 100 shares of XYZ stock at the price of $10 per share. You then place a trailing stop order on the 100 shares with a trailing stop price difference of $2 per share. (You can also specify a percentage as the stop price.) If XYZ stock price rises to $12 per share, then your stop price automatically goes to $10 per share. If XYZ stock price rises to $14 per share, your stop price automatically goes to $12 per share. If XYZ stock price starts to fall after reaching $14 per share, when it reaches $12 per share, it triggers a market order for the 100 shares in your trailing stop order. You still have made a $200 profit on the 100 shares of XYZ stock.

6. Order Expiration

1. Day Orders are valid only for the trading day on which you place the order. If an order is not executed by the end of the trading day, it expires automatically.

2. Permanent Orders are valid until they are executed or manually cancelled.

Trading on Margin

1. Trading on Margin

（1）Trading on margin refers to investor using the funds or securities in their brokerage account as collateral to borrow more funding from the broker to buy securities. The amount borrowed will be returned at a specified time with interest.

（2）With PPS, investors enjoy 4 times leverage for day trades and 2 times leverage for other trades. Margin funding is only available to accounts with a net value of $2,000 or above. (Note: If the net value of an account under margin funding drops below $2,000, the account runs the risk of mandatary liquidation.）

2. Shorting Securities

（1）Shorting refers to an investor using funds or securities as collateral to borrow securities from their brokers to sell. At an agreed upon time later, the investors agree to return the same number of shares of the same security, and agree to pay interest accordingly.

（2）At PPS, shorting is only allowed when an account has a net balance above $2,000.（Note: If the account balance drops to under $2,000 after the investor shorts a security, the account faces the risk of mandatory liquidation.)

（3）Cost for shorting is complex. Cost is usually related to the risk of the stock in question, including the stock’s liquidity, percentage of the particular stock being shorted currently, i.e. how many shares of the particular stock can be loaned. The cost for shorting a stock is not fixed. Investors can check details related to shorting each security on TWS. The details are presented as annualized percentage rates based on daily settlement.

（4） Investors who short securities may face the risk of margin calls, due to a shortage of shares for loan or the lender deciding to recall borrowed securities.

Tips:

If the account balance drops to under $2,000 after the investor shorts a security, the account faces the risk of mandatory liquidation. After a short order is executed, if there is a shortage of the security for lending, the broker may liquidate without informing the investor.

Account Types

1. Cash Account

A Cash Account is the most basic type of account. It does not support margin operations. It follows the T+3 clearing system. Day trades are also limited. After an order is executed, the funds are usually not immediately available for trading, because it has to follow the T+3 system. Therefore, a cash account usually cannot operate T+0 trades.

2. Limited Margin Account

A limited margin account cannot utilize margin for trading, but trades follow the T+0 clearing system. Once the total value of the account exceeds $2,000 the limitation on the margin account is lifted, and the account can utilize margin for trading. To raise the total value of a margin account above $2,000, the owner can either deposit additional funds or reinvest the profits from trades.

3. Margin Account

A margin account can utilize margin to trade securities, as long as the total value of the account is above $2,000. A margin account can also utilize margin to short stocks.

If a Margin Account’s net value is greater than $2,000, but below $25,000, PPS will limit the account’s T+0 trades to 3 trades within 5 consecutive trading days. If the account operates a 4th T+0 trade, the account will be suspended from all trading for 90 trading days.

Once the account value returns to $25,000 or more, the account can start T+0 trades with no limitation.

Note:

PPS recognizes all open accounts as margin accounts, unless the account owner does not meet the age requirements. Regulations require that investors between 18 and 21 cannot open margin accounts.

Asked Trading Questions

1. Does PPS support margin trades？

Yes. PPS supports margin trades. However, it is important to understand that each stock has a different interest rate for margin utilization, and the interest rate may change every day. For details, we suggest that investors input the desired stock into our system and check on details such as margin requirements, margin interest, commission structure, and whether or not shorting is supported for a particular stock.

2. Can I short stocks on Shanghai-Hong Kong Stock Connect with PPS？

In theory, PPS supports shorting on Shanghai-Hong Kong Stock Connect stocks (much like A shares). However, shorting of a stock is subject to whether risk control supports shorting of such stock. In reality, most stocks on Shanghai-Hong Kong Stock Connect cannot be shorted.

3. What is PPS’ leverage for U.S. stocks？

With PPS, the leverage for day trades is 4 times, while other trades enjoy 2 times leverage. Margin financing is only available when an account’s net value is over $2,000.

4. If my account’s net value is at $3,000, can I operate T+0 trades? Can I short stocks?

Yes. If your account’s net value is $3,000, you can operate T+0 trades and you can short stocks. However, if you account’s net value is under $25,000, you can only operate 3 T+0 trades in 5 consecutive trading days.

5. What type of securities can I trade with PPS? Are the types of the securities I can trade the same as those with Interactive Brokers? Can I trade options?

Accounts with net value below $25,000 can only operate 3 T+0 trades in 5 consecutive trading days. If an account’s net value drops below $2,000, it will only function as a limited margin account, i.e. the account can still operate T+0 trades (subject to maximum 3 T+0 trades within 5 consecutive trading days), but the account cannot utilize margin funding.

8. My order has a better ask price than the quoted price, but it was not executed. Why?

There are rare cases when an order with a better ask price than the published quoted price does not get executed. In most cases this is determined by the practices of the special dealer or market maker who deals with the particular stock.

Note: Quoted prices are for reference only. Under the U.S. stock market system, most trades are executed through special dealers or market makers. Once a trade is executed, they have 90 seconds to publish the price. To some extent, the real time quotes we see on all real time systems are somewhat delayed.

9. What is the trading unit of U.S. stocks？

U.S. stocks don’t have “lots”. On U.S. stock markets, a stock’s trading unit is a “share”. However, in order to reduce trading costs and to mitigate the risks associated with holding a position or shorting a position, certain brokers and market makers may only allow trades in units of 100 shares. In such circumstances, inexplicably, the minimum trading unit becomes 100 shares. Under such a circumstance, if an investor places an order for an odd lot (i.e. not X times 100 shares), the order may not be executed immediately. Brokers will only execute the order when they can combine this order with other orders of similar prices to form a new order that is X times 100 shares.

This is another reason why sometimes orders don’t get executed, despite better prices than quoted. Special dealers and market makers hold on to these orders to wait for other orders with similar prices to appear. In a case like this, even if the investor cancels the order, it may not take effect. Investors may have to contact their broker and have the broker contact the dealer or market maker in question and ask them to release the order. Due to circumstances like this, it is very important for an investor to have a broker that provides real time services.

Trading Options

1.Definition of Option

An option is the right to buy or sell a specific amount of a specific commodity at a specified time at a specific price. It is a financial tool derived from futures. It gives the buyer (or holder) the right to buy (or sell) the underlying asset. The holder of an option has the right to decide, within the specified time frame, to buy or not to buy, or to sell or not to sell the commodity, i.e. the holder of an option has the right to exercise the option or to let the option expire. The party who sold the option to the option holder, on the other hand, has the obligation to exercise what is specified in the option contract as decided by the party who bought the option.

2. Types of Options

（1）Based on the rights an option renders the holder of the option, options can be divided into Call Options and Put Options：

1）For a call option, the party who buys the option pays a premium to have the right to buy the commodity at the price specified in the option within the time frame specified in the option. However, the buyer of the option does not have to exercise the option and buy the commodity at the end the specified time frame. The buyer of the option can let the option expire without buying anything from the seller of the option. On the other hand, the seller of the option has the liability to sell at the price specified in the option as long as the buyer decides to exercise the option and buy the commodity.

2）For a put option, the party who buys the option pays a premium to have the right to sell the commodity at the price specified in the option within the time frame specified in the option. However, the buyer of the option does not have to exercise the option and sell the commodity. The buyer of the option can let the option expire without selling anything to the seller of the option. On the other hand, the seller of the option has the liability to buy at the price specified in the option as long as the buyer of the option decides to exercise the option and sell the commodity.

（2）Based on different exercise time frames, options can be divided into U.S. style options and European style options：

1）For a U.S. style option, the buyer of the option can exercise the option at any time when the option is valid.

2）For a European style option, the buyer cannot exercise the option until the due date. A European style option expires automatically after the due date.

（3）Based on the subject of the option, options can also be divided into, but not limited to Stock Options, Stock Index Options, Interest Rate Options, Commodity Options, and Foreign Exchange Options.

3. Important Terminologies Related To Options

（1）Strike Price (also called the Exercise Price): If X stock is currently trading at the market price of $10 per share, and you bought an option for $15 per share, your strike price is $15 per share.

（2）Due Date (also called the Exercise Date): If you buy an option with an due date of December 18, 1015, you have to exercise the option on or before that date. Otherwise the option is no longer valid.

（3）Open Interest：The portion of an option that has not been exercised and has not yet expired.

（4）Contract: Contracts are the trading units of an option. Stock Options are usually 100 shares per contract.

4. The 4 Basic Types of Option Trades

（1）Buy Call

When a stock’s price is rising, consider a “buy call” option.

Your profit = market price – strike price – option premium.

Your maximum possible loss = fees related to buying the option.

If an investor buys a call option on a stock, and the price of the stock rises as expected and it exceeds the strike price, the buyer of the option can exercise the option and profit from the trade.

If the stock price never reaches the strike price, then the buyer of the option does not exercise the option, and the maximum loss the buyer of the option will suffer is the option premium.

Example：

On December 29, 2011, the market price for GOOG was $636 per share. You spent $15.15 per contract to buy an option with the strike price of $650 and due date of January 2012. Essentially, you place and order for "buy to open GOOG-JAN-2012-$650-Calls"。This meant you predicted GOOG’s stock price would go up, and it would go above $650 per share by January 2012.

Once you bought the buy option, as the price of GOOG’s stock went up, the price of your option also went up. You could choose to execute the option before the expiration date to take your profits. If you decided to hold the option until the expiration date, and by then GOOG’s stock price was at $700 per share, you get the GOOG stocks at the price of $650.

If by the expiration date, GOOG’s market price was under $650, you could choose not to do anything and let the option expire. You don’t get the stock shares, but you don’t have to pay anything extra at that point. Your loss was the $15.15 per contract you spent on option premium.

（2）Buy Put

When a stock’s price is on the decline, consider a “buy put” option.

Your profit = strike price – market price – option premium.

Your utmost possible loss = option premium.

If an investor buys a put option on a stock, and the price of the stock decreases as expected and it goes below the strike price, the buyer of the option can exercise the option and profit from the trade. Since the price of a stock can never go below $0, the investor’s maximum profit is the spread between the strike price and the option premium.

If the stock price never drops below the strike price, then the buyer of the option does not exercise the option, and the maximum loss the buyer of the option can suffer is the option premium.

Example：

The current market price of stock X is at $10 per share. You spend $1 per share option premium to buy a put option that is due in the middle of this month (December 18) with a strike price of $10 per share. You spend a total of $100 on option premium, because the contract has 100 shares and the fee is $1 per share.

Assumption 1: Two weeks later, the price of Stock X goes down to $8 per share. You choose to exercise the put option, and sell the stocks at $10 per share. Your profit is:

Assumption 2: Two weeks later, the price of Stock X goes up to $15 per share. You choose not to exercise the put option and let it expire. Your loss is the $100 option premium.

（3）Sell Call

If you think a stock’s price is going down, you can also sell a call option.

If an investor sells a call option at a certain strike price, but the stock’s price never reaches or goes above the strike price, then the investor keeps the premium as profit.

On the contrary, if the price goes above the strike price, the investor loses the spread between market price and strike price (market price – strike price).

Note: For sell calls, the maximum profit is the premium of the call option.

Example:

Stock X is currently at $10 per share. I think the price will not go up to $12 per share. I sell a call option at the strike price of $12 per share, premium of $1 per share, and due date at the middle of the month (December 18). I immediately make $100 from the trade, but the $100 doesn’t belong to me unless the Stock X’s price does not exceed $12 per share on the due date.

However, if Stock X’s price goes against my prediction, and it exceeds $12, the person who bought the option will exercise his option, which means I have to buy back the contract. The biggest risk factor here is the undetermined market price of Stock X. My profit or loss is determined by the spread between the market price and the strike price. That is why, when Stock X’s price approaches $12, I will exercise the option first and buy back the shares. This way, I avoid uncontrollable loss if Stock X’s price rises further.

（4）Sell Put

If you think a certain stock’s price will rise, you can sell a put option on that stock.

If an investor sells a put option on a stock, and the price of the stock doesn’t fall below the strike price before the due date, the investor pockets the premium as profit.

In contrast, if the stock price falls below the strike price, the investor will lose the spread between the strike price and market price (strike price – market price).

Note: For a seller of a put option, the maximum profit is the option premium.

Example:

Stock X is currently trading at $10 per share. I think the price will not go below $8 per share. I sell a put option at the strike price of $8 per share, premium of $1 per share, and expiration date at the middle of the month (December 18). I make $100 from the trade, but the $100 doesn’t belong to me unless Stock X’s price does not go below $8 per share before the expiration date.

However, if Stock X’s price goes against my prediction and falls below $8 per share, I will be forced to exercise the option. If the price goes to $7. I don’t lose anything, except for the commission on the put option.

5. Frequently Asked Questions

（1）What is the minimum trading unit for U.S. options?

The minimum trading unit for U.S. options is a contract. Generally, a contract contains 100 shares of a particular stock.

Example:

A call option on SPY stock, with a due date of March 11, 2016, strike price of $195.50 per share, premium $2.10 per share. This means the total premium for a contract is $210. $2.10 premium per share x 100 shares = $210 per contract.

（2）What is Tiger Broker’s standard commission for U.S. option trades?

Tiger Broker’s standard commission for U.S. option trades is $0.75 per contract, with a minimum of $2.99 per trade.

（3）Does PPS support pre-market and after hour trading for U.S. options？

No. PPS does not support pre-market and after hour trading for U.S. options. U.S. option trading hours are 9:30 AM to 4:00 PM, U.S. Eastern Standard Time.

（4）Does option trades take up my T+0 trade quotas?

Yes, qualified option trades do take up T+0 trade quotas. The rules are the same as those for U.S. stock trades.

（5）Does PPS support early exercising of options?

PPS currently does not support early exercising of options. Investors who need early exercising can log in at the TWS client to execute. (For details of early exercising of options, please call Tiger Broker’s customer service.)

（6）For options I hold, can I liquidate them at any time before the expiration date？

Before the expiration date, all options, whether they are buy options or sell options, can be liquidated at market price.

（7）By due date, if I don’t voluntarily exercise the option or liquidate them, what will happen to the options I own?

Options that expire within the month, and the market price is $0.01 or better than the strike price, will be exercised automatically. Investors whose deposit drops below the minimum requirement for option exercising, the options will be liquidated at market price.

(8) By due date, the buy call option or buy put option’s price is less than $0.01, and the investor does not voluntarily exercise the option or liquidate. What will happen to the options?

At that point, the options will automatically expire. The investor’s total loss is the option premium. Under most circumstances, the investor will suffer even greater losses if he voluntarily exercises the option.

（9）If I hold sell options, can they be forced into early exercising of options before the expiration date?

Yes, this may happen. The options offered by U.S. companies are U.S. style options. In other words, buyers of U.S. company options can exercise the options at any time between the option purchase and the option due date. However, U.S. style options’ value may still rise during the remaining time before the due date. Therefore only under rare circumstances do options get exercised right after purchase.

PPS currently does not support inquiries on records of option expirations, forced liquidations, and system liquidations.

Basic Information of US Stock Trading

Trading unit

The trading unit of US stock is one share. You can trade as few as one share in each transaction. For further details, please refer to "Fees & Charges".

Settlement

The settlement day of US stock trading is 3 business days after the trade is executed (T+3).

Trading Hours

US Eastern Time*

9:30am to 4:00pm

US Time*

9:30pm to 4:00am of the following day (Summer Time**)
10:30pm to 5:00am of the following day (Winter Time**)

* Without lunch break
** The Summer Time in US begins at 2:00am (local time) on the second Sunday in March and reverts to Winter Time at 2:00am (local time) on the first Sunday in November.

The above information is subject to change without notice.

Tax

In general, foreign investors (i.e. non-US citizens or residents) are not required to pay profit tax on US stock investment by filling a simple form. However, they are still subject to a US tax up to 30% on dividends received from US stocks1.

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Forex Trading

Risk disclaimer
Trading leveraged products such as CFDs and FΧ involves substantial risk of loss and may not be suitable for all investors. Trading such products is risky and requires previous knowledge, it may results in a loss of a part or all of your invested capital or more than your invested capital. Moreover, trading with the Tradeo Social Trader by copying the trades of other traders involves a high level of risk, even when copying the top-performing traders/worst-performing traders. Such risks include the risk that you may be following/copying the trading decisions of possibly inexperienced/unprofessional traders or traders whose ultimate purpose or intention, or financial status may differ from yours. Past performance of Tradeo Social Trader is not a reliable indicator of its future performance. Please click here to see full disclaimer.